Google Or Amazon? 5 Experts Share Their Thoughts
Both Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon.com, Inc. (NASDAQ: AMZN) are scheduled to report earnings this Thursday, after market close. Five experts spoke to Benzinga and shared their thoughts.
Analysts seem quite bullish on Google, and usually see some kind of upside potential in the stock. However, many see a limit to its growth.
As earnings dawn, Dr. Stoxx shed some light on his thoughts: “Google is a great, must-own company whose shares are cheap, currently trading 15 percent below the S&P's forward earnings multiple. But compared to Apple and Facebook, it's desperately 'unsexy.'”
“The mobile market is promising," he added, "but it needs a new 'iPhone-like' product.”
Regarding earnings, he believes the company “will probably meet, maybe beat, but in either case, cause a collective yawn by the market.”
For his part, Serge Berger thinks this a pretty important quarter for Google traders focusing on the technical picture.
“The stock has made a concerning series of lower highs since early 2014, all of which are pushing weight on the $500 area. If this level gives after earnings, then downside quickly opens toward $450, which would be where it could fill its up-gap from October 2013,” he explained.
Technician Rod David also weighed in on Google: “The 79-point drop from November bounced back 55 points into last week's high. Its prior high was tested, but held. The 40-point reaction down since then may be only defensive posturing, constructive pessimism, which is potentially bullish from a contrarian perspective. But greeting earnings from under 502 would be vulnerable to reacting down sharply.”
Research firms are also quite bullish on Amazon. However, the experts consulted were not such big fans.
Dr. Stoxx said “Amazon is such a victim of its own success, it's an embarrassment to American enterprise.”
“How can a company capture 14 percent of all online sales and still struggle to make a profit?” he asked.
“Amazon is looking to bounce back from a 0.95 cent loss last quarter -- caused by the Fire fiasco -- by posting its first net profit since 4Q 2013. Estimates have been revised downward from 0.23 last week to 0.17 this week, but it may have trouble even meeting that.
"I have a long-term sell signal on the company, and will continue to hold to that until it narrow its focus.”
Mike Lingenheld, managing editor of Cup & Handle Macro Research, is also critical on Amazon’s low profit business model. “Since becoming a public company in 1997, Amazon has earned less than $2 billion in cumulative net profits. In contrast, Apple made $2 billion in net profit every 11 days last quarter," he said.
Christian Tharp, lastly, rounded off Amazon with a technical spin.
"Amazon has major support at $185 dating back to May of last year. The stock also has a trendline of resistance that is currently sitting near $330.
"The release of the company's earnings report could very well be the catalyst that sends the stocking breaking one of those key levels," he concluded.
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